Reader mail: A rate freeze ‘rewards bad behavior’

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Blogger’s note: This item came in as an e-mail from a reader. Yes, it echoes numerous comments that have appeared here over the past few months. What strikes me is that this sentiment continues to be absent from the political discussion in Washington, and from most media coverage of the issue.

DG writes, ‘I know it’s not going to make a bit of difference to say this, but the proposed subprime rate freeze is nothing less than a slap in the face to millions of hard-working, solvent Americans who didn’t want to saddle themselves with loans they might not be able to repay, and so didn’t take them on. Those of us who stayed out of the housing market the last several years, knowing that, long-term, houses couldn’t possibly be worth as much as sellers were asking, and that ARM loans were a bad idea - have just been tossed aside in favor of a lot of selfish, even greedy people who helped speculate the market into the stratosphere and didn’t know how or didn’t care to read the fine print.

‘President Bush’s plan rewards bad behavior. It rewards people who were frankly too stupid to understand that you cannot expect to pay $1,200 a month for a $500,000 home forever. My family’s reward for me knowing better? We get to remain in an apartment in 2008 and longer, watching the Los Angeles housing market remain dramatically overvalued while the government bails out families whose heads of household just got the ‘do-over’ of their lives, and all at my family’s expense. I guess I should have taken out a $1,000,000 loan, since the government wasn’t ever going to let me be foreclosed on.

‘I recognize the ‘human side’ of the equation that many supporters of Bush’s measures are touting. I just wish someone would recognize the human side extends to people such as my wife and myself, who have been steadily working for ten years and are now really no closer to home ownership than we were in 2004, 2005, 2006 or 2007. We need the market to reset to some kind of reality, so that our combined six-figure-plus income can actually afford a house in a safe and decent neighborhood again. Thanks to everyone from the pundits to the bureaucrats for making our ‘American dream’ all the more impossible with this move.’

Thanks, DG. Comments? Thoughts? Email story tips to peter.viles@latimes.com.